We all know that technical analysis helps the traders to find the best trade setups in the Forex market. But do you really think that the new traders have precise knowledge on this sectors? Understanding the basic details of the technical analysis is really easy but when it comes to advance market analysis, things become really hard. Majority of the retail traders are making the same mistake repeatedly. If you are struggling with Forex trading profession read this article very carefully. After reading this article, if you can bring positive change in your trading system, you won’t be losing any money at the end of the month. It’s true that you will have to face losing orders but at the end of the year, you will earn huge amount of money. Let’s learn about the five most common mistakes in technical analysis.
Lower time frame trading
When you do the technical analysis in the lower time frame, you have to deal with many false signals. It’s true in the lower time frame you will get many trade setups but what about the quality of those trades? To be honest, most of the time you will have to trade low-quality trade setups. For this very reason, the expert traders always suggest the new traders do the technical analysis in the higher time frame. At the early stage of your trading career, higher time frame trading will be a little bit boring to you but after few months you will feel extremely comfortable with the higher time frame trade setups.
Use of indicators
The new traders are always fascinated with indicators reading. Indicators can never help you to find profitable trades in the market. You have to use the key support and resistance level of the market. Some of you might say that without using the indicators it’s almost impossible to filter the false trade. It’s true that indicators can help you to find the best trades but for that, you need to have extensive experience in the retail trading industry. Many expert traders often consider multiple time frame analysis as the best way to find profitable trades at any market conditions. So, learn this technique to find the best trades.
Using EAs and bots
Many people have spent thousands of dollars in EAs and bots. But do you really think that EAs and bots will help you to find profitable trades in the market? If these EAs and bots can generate huge profit in the market, why the developers are trying to sell these things to you? The manual trading system has always been the best way to trade the market. Spend some money on paid course and webinars. The more you will know the better you will become at currency trading profession. Never try to trade this market with gut feelings as it will ruin your trading career.
Overtrading is nothing but the result of your trade addiction. If you always stare at your trading platform it won’t take much time to find good trades. But do you really think that those setups are good enough to secure your profit? The professional traders are always concern about their investment. They always filter the best trade to reduce their risk factors in the Forex market. If you start over trading the market, you will find yourself losing money on regular basis. So learn to stay on the sideline since it is one of the easiest ways to protect your trading capital from the wild swings of the market.
Trade with confidence
Lack of confidence is another key reason for which the novice traders are always losing money. You have to trade the market with the high level of confidence. Even after losing a few trades, you should never become frustrated. Look for potential trade setup in the higher time frame to recover your loss.